02628cam a22002657 4500001000600000003000500006005001700011008004100028100001800069245014200087260006600229490004100295500001900336520142000355530006101775538007201836538003601908690012101944690008102065700002502146710004202171830007602213856003702289856003602326w6851NBER20161209102221.0161209s1998 mau||||fs|||| 000 0 eng d1 aStern, Scott.10aEmpirical Implications of Physician Authority in Pharmaceutical Decisionmakingh[electronic resource] /cScott Stern, Manuel Trajtenberg. aCambridge, Mass.bNational Bureau of Economic Researchc1998.1 aNBER working paper seriesvno. w6851 aDecember 1998.3 aThis paper studies the consequences of physician authority on pharmaceutical prescribing. Physicians engage in a costly process of particular conditions and characteristics. The relative efficiency of this matching process results from the diagnostic skill of the physician along with the investments made by the doctor in learning about different drugs. While the underlying level of physician skill or knowledge cannot be observed, differences among physicians in terms of these attributes are reflected in their prescribing behavior. We provide evidence for two major findings regarding the exercise of physician authority in this context. First, there is substantial variation in the degree to which physician prescribing is concentrated (i.e., some physicians prescribe a more diverse portfolio of drugs than others). Second, this concentration is correlated with observable drug characteristics. In particular, concentrated prescribers tend to prescribe drugs with high levels of advertising, low prices, and high (lagged) market shares. Our empirical results provide evidence for the importance of both physician effort and diagnostic ability in the prescribing process. In particular, physicians who differentiate among their patients more finely are more likely to have less concentrated prescribing portfolios and to be less sensitive to information sources which promote the use of drugs for the aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD23 - Organizational Behavior • Transaction Costs • Property Rights2Journal of Economic Literature class. 7aI11 - Analysis of Health Care Markets2Journal of Economic Literature class.1 aTrajtenberg, Manuel.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w6851.4 uhttp://www.nber.org/papers/w685141uhttp://dx.doi.org/10.3386/w6851